Public Loan Forgiveness

Public Loan Forgiveness

The U.S. Small Business Administration has released a single-page form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, as well as newly updated and revised forms to comply with the latest stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgivable loans to help them deal with the financial fallout from the coronavirus pandemic. The legislation required that the SBA provide simplified forms within the first 24 hours of the signing into law. This was to make it easier to apply for forgiveness. It also included conditions to encourage banks in the community to lend more, especially to minority-owned businesses who had a difficult time getting loans last year.

Public Loan Forgiveness

“The Small Business Administration met the requirement of releasing the one-page form for PPP loan forgiveness within 24 hours of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released new forms.”

Forgiveness terms in the first draw of PPP loans

Public Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans are suitable to forgive loans. This applies when the loan is disbursed within an 8 to 24-week timeframe.

  • Pay and worker levels are kept at a constant level.
  • The loan proceeds can be used to pay expenses for payroll or other eligible expenses.
  • A minimum of 60% of the proceeds go to expenses for payroll

Second Draw PPP Loan Forgiveness Conditions

Second Draw PPP loans to eligible borrowers are qualified for loan forgiveness if the loan is paid within an 8to 24-week time frame.

  • Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
  • The loan funds can be used to pay payroll costs or other expenses that are eligible.
  • At least 60% of proceeds go to expenses for payroll
  • How to apply for loan forgiveness and the time to apply

The borrower is eligible for forgiveness after the loan’s proceeds for which the borrower wants forgiveness have been utilized. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 years of the end of the covered period the PPP loan payments can no longer deferred and the borrower will be required to make payment to their PPP lender.

Download Public Loan Forgiveness

Gallery of Public Loan Forgiveness


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